Vietnam Electrical Equipment Market Outlook to 2030

Vietnam Electrical Equipment Market Overview

• The Vietnam Electrical Equipment Market is valued at USD 4.2 billion, based on comprehensive five-year historical analysis and the significant advancements in infrastructure development and manufacturing industries. The market growth is primarily driven by increased investments in power generation, transmission, and the adoption of smart grid technologies. A growing demand for energy-efficient solutions in industrial and residential sectors has also contributed to the markets expansion.

• Vietnam's electrical equipment market dominance is seen in major cities like Hanoi, Ho Chi Minh City, and Da Nang. These cities serve as industrial and economic hubs, supporting a robust demand for electrical equipment across various sectors such as manufacturing, construction, and power distribution. The concentrated presence of industrial zones, coupled with substantial government support for modernization, enables these cities to lead in terms of infrastructure and energy consumption.
• In 2023, the Vietnamese government approved the National Power Development Plan VIII, which aims to increase power generation capacity to 146 GW by 2030. The plan emphasizes the development of renewable energy, transmission infrastructure, and smart grid technologies. This initiative will drive the demand for electrical equipment like smart meters, transformers, and switchgears to support the countrys growing energy needs and integration of renewable energy sources.

Vietnam Electrical Equipment Market Segmentation

By Product Type: The market is segmented by product type into switchgears, transformers, circuit breakers, cables and wires, and batteries and accumulators. Among these, switchgears and switchboard apparatus hold a dominant position in the market, driven by their essential role in controlling, protecting, and isolating electrical equipment. The increasing demand for switchgears is fueled by ongoing projects in the power generation and distribution sectors and the expansion of urban infrastructure.

By End User: The market is segmented by end users into industrial, commercial, and residential. The industrial sector dominates the market, driven by Vietnam's rapid industrialization and the expansion of its manufacturing base. The ongoing development of industrial parks and zones across key cities such as Ho Chi Minh City, Binh Duong, and Da Nang has created significant demand for electrical equipment. Moreover, the government's focus on expanding renewable energy projects, especially in the industrial sector, continues to drive the need for high-quality electrical components.

Vietnam Electrical Equipment Market Competitive Landscape

The market is dominated by a few key players, with both local and international companies competing for market share. The competitive landscape features companies focusing on innovation and expanding their product portfolios to cater to the growing demand for energy-efficient and technologically advanced equipment.

Vietnam Electrical Equipment Market Analysis

Market Growth Drivers

• Government Investment in Infrastructure Projects: Vietnam's government has increased its infrastructure spending, driving demand for electrical equipment. In 2024, the government allocated VND 700 trillion (USD 29.6 billion) to infrastructure projects, including power generation, transmission, and distribution networks. These large-scale projects, such as the North-South high-voltage transmission line and new power plants, create a strong demand for electrical equipment like transformers, switchgears, and cables.
• Rising Energy Demand in Industrial Zones: Vietnams industrial sector, which grew by over 4 million units in terms of power consumption in 2023, continues to expand, increasing energy demand. This has resulted in the need for advanced electrical equipment to ensure efficient energy distribution and consumption.
• Increased Focus on Renewable Energy Projects: Vietnam's renewable energy sector is rapidly growing, driven by the government's commitment to increasing the share of renewables in the energy mix. The Vietnam Energy Association forecasts that by 2025, the country will have over 15 GW of installed solar capacity and 20 GW of wind energy capacity.

Market Challenges

• High Dependence on Imported Raw Materials: Vietnams electrical equipment industry heavily depends on imported raw materials like copper, aluminum, and steel. The Vietnam Customs Department reported that in 2023, over 65% of raw materials for electrical equipment production were imported, making the market vulnerable to global supply chain disruptions and fluctuating prices.
• Lack of Skilled Labor in Electrical Equipment Manufacturing: The electrical equipment industry in Vietnam faces a significant shortage of skilled labor, particularly in high-tech manufacturing and assembly. According to the Ministry of Labor, Invalids, and Social Affairs, the electrical and electronics sector required over 250,000 additional skilled workers in 2024.

Vietnam Electrical Equipment Market Future Outlook

Over the next five years, the Vietnam Electrical Equipment industry is expected to grow substantially, driven by continuous government support for energy infrastructure development and the expansion of renewable energy projects.

Future Market Opportunities

• Expansion of Smart Grid Infrastructure: Over the next five years, Vietnams smart grid infrastructure will expand significantly, driven by government investments and public-private partnerships. By 2028, smart grid projects are expected to cover 80% of the national grid, necessitating the installation of advanced electrical equipment such as smart meters, automated substations, and grid management systems.
• Growing Demand for Energy-Efficient Equipment: With Vietnams increasing focus on energy efficiency, the demand for energy-efficient electrical equipment is expected to rise. By 2028, the government plans to reduce national energy consumption by 10 million kWh through energy-efficient appliances and equipment. This will drive demand for advanced electrical components such as low-loss transformers and energy-efficient circuit breakers, as businesses and households seek to comply with energy-saving regulations.